Adjusted gross income (AGI) is your total income minus certain adjustments to income. On the 2025 Form 1040, take total income from line 9, subtract the adjustments from Schedule 1 (line 26, carried to line 10), and the result is your AGI on line 11a. It is figured before your standard or itemized deduction.
The formula, step by step
- Add your taxable income from all sources: wages, interest, dividends, business profit, taxable retirement withdrawals and unemployment pay. That is total income, line 9.
- On Schedule 1, Part II, add the adjustments you qualify for. The total is line 26 and carries to Form 1040, line 10.
- Subtract line 10 from line 9. That is AGI, line 11a.
Many limits and phase-outs are tied to AGI, and Illinois starts its return from federal AGI. See our Illinois guide.
Main adjustments and 2025 limits
| Adjustment | 2025 limit or rule |
|---|---|
| Educator expenses | $300 ($350 in 2026) |
| HSA contributions | $4,300 self-only, $8,550 family ($4,400 and $8,750 in 2026) |
| Half of self-employment tax | Half the Schedule SE tax: 15.3% of 92.35% of net profit, with the Social Security part stopping at $176,100 |
| Self-employed retirement plan | Plan limits apply, such as $70,000 overall and $23,500 of 401(k) deferrals |
| Self-employed health insurance | Deductible for self-employed people, with limits |
| Early-withdrawal penalty | The penalty a bank charged for cashing savings early |
| Traditional IRA | $7,000, plus $1,000 at 50 or older ($7,500 and $1,100 in 2026); phases out with a workplace plan from $79,000 to $89,000 single and $126,000 to $146,000 joint |
| Student loan interest | Up to $2,500; phases out from $85,000 to $100,000 single and $170,000 to $200,000 joint |
| Alimony | Only under agreements made by December 31, 2018 |
| Moving expenses | Only for the Armed Forces (the intelligence community is newly added) |
See self-employment tax, IRA and 401(k) contributions and HSAs for details.
AGI, taxable income and MAGI
- AGI is total income minus adjustments.
- Taxable income is AGI minus the standard or itemized deduction (line 12e), the qualified business income deduction (13a) and the Schedule 1-A deductions (13b). Tax brackets apply to it.
- MAGI is AGI plus add-backs that differ by tax benefit. For the senior deduction, it adds back excluded foreign or territory income. See who qualifies for the $6,000 senior deduction.
Example (invented numbers, tax year 2025)
A single filer has wages, bank interest and freelance profit.
| Item | Amount |
|---|---|
| Wages | $58,000 |
| Interest | $350 |
| Freelance net profit | $12,000 |
| Total income (line 9) | $70,350 |
| Half of self-employment tax ($1,696 divided by 2) | $848 |
| Student loan interest | $1,200 |
| HSA deposit made on your own | $1,500 |
| Adjustments (line 26) | $3,548 |
| AGI (line 11a) | $66,802 |
| Standard deduction, single | $15,750 |
| Taxable income before other deductions | $51,052 |
The self-employment tax is $12,000 x 92.35% x 15.3%, about $1,696. Any qualified business income or Schedule 1-A deduction would lower the last line.
Finding last year's AGI
Look in your online IRS account under tax records, on last year's return, or on a free tax transcript (see tax transcripts). To sign an e-filed return, the IRS asks for your prior-year AGI, a prior-year Self-Select PIN or an Identity Protection PIN. First-time filers, or anyone whose prior return was not yet processed, enter $0. For 2026 returns filed in 2027, use your 2025 AGI.
Common mistakes
- Calling taxable income "AGI".
- Using the wrong year or line, such as line 11 from an older form instead of 11a.
- Missing adjustments you qualify for, like a self-made HSA deposit.
- Treating alimony or moving costs as deductible when the rules do not allow it.
What to do next
Collect your income forms, check Schedule 1 for adjustments you qualify for, and write down last year's AGI before you e-file. Our standard vs. itemized deductions guide shows what comes after AGI. If your return includes self-employment or several retirement accounts, a CPA can help confirm the numbers. More answers are in Tax questions answered.
Frequently asked questions
Where is AGI on my tax return?
On the 2025 Form 1040 it is line 11a, repeated on line 11b. Older returns show it on line 11.
Is AGI the same as my wages?
No. AGI includes all taxable income, then subtracts adjustments, so it can be higher or lower than your W-2 wages.
What AGI do I enter if I cannot find last year's?
Check your IRS online account or a transcript. If you did not file last year or the return was not processed, enter $0.
Does AGI affect my credits and deductions?
Often. Medical expenses count only above 7.5% of AGI for 2025, and many credits phase out as AGI rises. See tax brackets and rates for how taxable income is taxed.
Official sources
- IRS: Adjusted gross income
- IRS: Form 1040 (2025)
- IRS: Schedule 1 (Form 1040), 2025
- IRS: Modified adjusted gross income
- IRS: Validating your electronically filed tax return
- IRS: Rev. Proc. 2024-40 (2025 inflation adjustments)
This page is a plain-language summary. The official source controls if there is any difference.
General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.